Stop me if you’ve heard this one before: A shopper, a wallet, and a credit card walk into a store… Increasingly, though, they’re not walking into a store where they have to pay the price that’s on the tag.
Placer Labs, a research firm that tracks retail store traffic, noted in a recent report that fewer than two in five shoppers are visiting full-price shops to buy their clothes, down from more than half of them just five years ago. Additionally, more of them are now visiting off-price stores, like T.J. Maxx and Marshalls, than full-price ones.
“Last year saw an acceleration of the redistribution of foot traffic between non-off-price apparel retailers, off-price apparel chains, and thrift shops—a trend which began even before covid,” the report reads.
Looking for something special
As more and more observers have noted, shopping in-person sucks these days. For a long time coming, but especially after the pandemic kept consumers at home, people increasingly have done their shopping online.
But off-price stores bet that they’ll always able to keep people in their stores because they have a business model that isn’t as easy to replicate on the internet: Maxxinistas and the like have an approach that’s more akin to treasure hunting.
“In today’s environment, we believe this kind of shopping experience can serve as a break in the day, and as some ‘me time’ for our customers, and in the future will continue to be a major draw for consumers to our stores,” CEO Ernie Herrman, of TJ Maxx’s parent company TJX, told analysts in 2020.
Thrift stores, where the stigma associated with buying other people’s hand-me-downs has long worn off, also provide a similar enticement. “Shoppers visit our stores because they know they are going to find something unique,” says Steve Preston, CEO and president of Goodwill International. “There is a large network of thrifters on social media who post about the treasures they find.”
Off-price preference for a reason
Perhaps the most obvious reason that consumers are shying away from full-price clothing is that they’re worried about being able to afford it. Though wage growth numbers are finally outpacing inflation and the economy seems to be holding up plenty well despite recession fears, Americans have spent the years since the pandemic began in a foul financial mood.
Plus, among shoppers who are looking for discounts, getting a deal is more of a need than a want. The Placer Labs report suggests that full-price stores “continued to feature a median household income (HHI) that was significantly higher than the nationwide baseline, while the captured markets of off-price chains and thrift stores featured median HHIs below the nationwide median.”
On a May earnings call last year, Ross Stores CEO Barbara Rentler keyed in on how the search for a good price remained one of its main propositions.
“The macroeconomic, geopolitical and retail environments remain uncertain,” she said. “Moving forward we remain keenly focused on delivering the most compelling bargains possible as our customer is more motivated than ever to seek the best branded values.”
Related stories
Nobody in the US wants to pay full price for clothes anymore
The secondhand clothing market is exploding
Giving up fast fashion for a year taught me how to shop again